The possibility of water shortages and increasing water demands has shifted the emphasis of water management from issues of supply to issues of demand. The challenge today is to balance water demands against water supplies. Therefore, water can be considered a resource with economic characteristics. Water may have marketable private good or public good characteristics, common property resource, externality and public utility characteristics and option values. Future water allocation will be dependent upon an integrated approach to the economic analysis of water resources management with an understanding of water as an economic good and the adoption of approaches from experiences in other resource areas.
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